A general resource for employees and management alike, covering issues old and new in the law of Ontario employment relationships.

Thursday, November 10, 2011

Legal Remedies of the Still-Employed

I've had a remarkable number of calls lately from people who still
have their jobs, but who take issue with actions of their employer, be they
disciplinary issues, changes to the nature of the job, or unreasonable employer
demands backed up by a threat of termination.

It is possible to
take the position that you have been constructively dismissed. As I've
discussed before, it isn't easy, and it's never guaranteed. It adds an
additional couple of layers of uncertainty onto an already uncertain process. And while it is possible to sue your employer while still working for them, that’s
only appropriate in some situations (and will likely cause problems for you
with most employers).

The last example I gave really puts this in perspective. An employee facing unreasonable demands and a
threat of termination has two choices:
Give in to the demands, or risk being unemployed. Assuming that it isn’t a demand they are
entitled to make, they won’t be able to make out a case for just cause when you
refuse to do so, which means you’ll be entitled to pay in lieu of notice of
termination if you get fired.

But how much is that? And
is it enough? Let’s suppose that you
make $50k per year, and are entitled to approximately six months’ notice. You’ll have a claim worth $25,000. Which seems like a lot of money, when you say
it this way: If I get fired, I can get
$25,000. But it isn’t that simple. First off, it’s truer to say “I can maybe get $25,000 or so.” And then you have to
factor in legal fees (which can be substantial), taxes, the fact that any EI
entitlements will be deferred until after the six month period...not looking
like such a lot of money anymore, is it?
Oh, and don’t forget that you may have to go to the end of a litigation
process, years out, before you see a dime of it - unlike straight dismissal cases, employers are often very reluctant to acknowledge any basis for liability in constructive dismissal cases.

And here’s the hitch: You’ll
be unemployed. How long will you be out
of work? Six months? A year?
Longer? Even if it’s shorter,
there’s no windfall to be had here – if you find an equivalent new job in two
months, you’d only win two months’ pay from your own employer, assuming you win
at all. (That's the 'mitigation principle' at work. Don't be discouraged from looking for work, though, or accepting a job - failing to take reasonable steps to secure replacement employment can reduce your entitlements, too.)

So you really have to say “I can maybe
get $25,000 or so, less legal fees, but I’m not sure when I’ll get it, and in
the mean time I’ll be unemployed and I’m not sure when I’ll start getting a
steady pay cheque again.”

In other words, when remaining gainfully employed
is an option for you, you should think very carefully about your options before
throwing that away in exchange for a chance of some litigation entitlements.

*****

This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.